What: Shares of Monster Beverage (MNST) gained 13.4% in November, according to data from S&P Capital IQ. It has been a bumpy year, but the energy drink veteran's shares have soared more than 40% year-to-date.
So what: The big driver of Monster's November rally was a fantastic third quarter report posted in the first week.
Sales rose 19% year-over-year to $757 million, earnings soared 44% higher to land at $0.84 per share, and both figures stomped Wall Street expectations. The next day, Monster shares jumped more than 14% higher, essentially accounting for the entire month's strength in one fell swoop.
Now what: The company is getting into all kinds of new business opportunities these days. From exploring new international markets to selling high-margin concentrate for soda machines and easy bottling in far-flung geographic corners, the potential dollar signs are popping up all around Monster.
For example, 9% of its third quarter sales came from the new concentrate business. That may look small, but the exceptional profit margins in this hyper-efficient business model lifted gross margins from 53.8% to 61.5%.
And it's pretty obvious where many of these new ideas started. Thanks to a deep partnership with soft drink titan Coca-Cola (KO), Monster now has access to a worldwide, world-class distribution network and some of the best production facilities on the planet.
"We are pleased to report good progress on the implementation of our strategic alignment with Coca-Cola bottlers," said Monster CEO Rodney Sacks in November. That's a solid candidate for the coveted "understatement of the season" awards.
